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The governor of Illinois,JB Pritzker, has announced a plan to raisesin taxeson goods like alcohol, tobacco and marijuana. To support his campaign to raise these
The governor of Illinois,JB Pritzker, has announced a plan to raise"sin taxes"on goods like alcohol, tobacco and marijuana. To support his campaign to raise these taxes, he has made two claims:
- "These new taxes will result in a large reduction of purchases of goods that are bad for people's health, and lead to fewer incidences of drunk driving."
- "My economic advisors have also assured me that taxing goods with very inelastic demand like cigarettes and alcohol will minimize the deadweightloss due to the tax."
These two statements cannot both be true at the same time as they are contradictory! Why? (Please be brief.)
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